CrunchPad coulda been a contendah…

Arrington had hopes of building a 12-inch Internet touch-screen tablet device that was dead simple and easy to use. The kind of thing you just surfed while plopped on your couch.

Well, the project is dead, Arrington said, following a dispute with his manufacturing partner Fusion Garage, who bizarrely decided to take over the project without Arrington’s permission. Arrington said it’s like Foxconn, the hardware manufacturer who Apple works with on the iPhone, declaring that they were going to sell the iPhone themselves without the assistance of the folks in Cupertino.

Here’s an excerpt:

We (Fusion Garage and Arrington) jointly own the CrunchPad product intellectual property, and we solely own the CrunchPad trademark.

So it’s legally impossible for them to simply build and sell the device without our agreement.

We’re still completely perplexed as to what happened. We think they were attempting to renegotiate the equity split on the company behind CrunchPad, which was to acquire Fusion Garage. Renegotiations are always fine. But holding a gun to our head two days before launching and insulting us isn’t the way to do that. We’ve spent the last week and a half trying unsuccessfully to communicate with them. Our calls and emails go unanswered, so we can’t even figure out exactly what’s happened.

Arrington said he’s getting his lawyers involved and they’ll work things out eventually. But for now the dream is dead. It was never meant to be a huge seller though Arrington said he was getting big-time help from hardware companies like Intel to a large retailer, who agreed to cut him a deal to help spur on sales.

“It’s a sad day at TechCrunch HQ. Hitting the publish button on this post, which makes all of this so…final…is a very hard thing to do,” he wrote. “I’m enraged, embarrassed, and just…sad. The CrunchPad is now in the DeadPool.”

Now we’ll just have to wait for that other tablet to come from that small company down in Cupertino.